Tag Archives: Sales

We are on the rebound!

The homebuilding and housing industry has seen pretty dark days. But for the past few years, things have definitely been looking up. Here are a few reasons we at the Contrado Group are feeling pretty thankful this Turkey Day.

1) ¬†Arizona has not one, not two, but THREE spots on the forecasting for 2014′s Top 10 Housing Metros

Thank you Prescott, Phoenix, and Tuscon!

2) ¬†New Homes sales are up 20%

Recovery has definitely been shaky, but 2013 has shown a significant increase in new home sales. According to the Commerce Department, 20% more homes have been sold nationwide this year than in 2012. This is a good sign for us, and we are thankful for it.

3) ¬†55+ single-family markets are on the rise too

Although there is continued improvement in sales in all segments of the market, the 55+ single-family markets have shown a significant increase. With improved market conditions, potential new home buyers have been able to sell their current homes so that they can buy new homes that fit their specific needs.

4) ¬†Technology is making everything better for everyone

Whether we like it or not, the speed of technology today is changing how homes are designed, built, and sold. The technology that new homes offer is also a major selling point to today’s consumer, only making it easier for home builders to sell more of what customers really do want.

The New Information Age

We are just beginning to wrap our heads around the vast amounts of information available to us in this new information age. With computer processor speed doubling every 18 months along with increasing storage capacity, we can afford the means to assess data in its entirety. This phenomena is known as “Big Data” which refers to our new found ability to crunch a vast quantity of information, analyze it instantly, and draw some astonishing conclusions.

Collecting information is just the beginning of creating the ability of artificial intelligence as we saw way back in Stanley Kubrick’s 2001 Space Odyssey

HAL 9000 (a computer) decides what’s best…………….

Gone Are The Days Of Traditional Statistical Analysis

In the old days, statisticians would have a hypothesis and test it with a random sample of a population. The greater the size sample of the population being measured, the more accuracy of the sample being a representation of the entire populace. This would reinforce the notion of “causality”, that being, we as humans have a yearning desire to try to understand the world around us. What causes things to happen? For example, say we have a theory that someone buys a home because they eat eggs in the morning. ¬†As you can imagine, there’s a fair amount of people who get up in the morning, fix themselves some eggs for breakfast and go off into their day. And, of people who purchase homes, it can be said that there may be a high degree that they also had eggs for breakfast. Thus, eating eggs causes home sales? So, is it realistic to prove this¬†preposterous¬†hypothesis¬†with a statistical analysis? However, if one was to gather a random sample of new homeowners, there would be proof that would suggest that egg consumption yields new home buying behavior. This type analysis is known as causality as opposed to correlation and takes the form of trying to understand a phenomena, coming up with a hypothesis, and proving it through statistic analysis.

Causality vs. Correlation Analysis

Some things are best left to try not to understand

Within a correlation model of understanding, we are able to assess just pure raw data and observe correlations¬†without¬†trying to understand the cause of an event. What this enables businesses to do, is to view highly correlated events and capitalize from their relatedness. In other words, if a given situation¬†yields¬†outcomes with a high degree of correlation, then why bother trying to understand why?

In the book, Big Data – A Revolution That Will Transform How We Live, Work, and Think the author explains how retailers are just beginning to understand their abilities to assess data for what its worth and understand the correlations of relationships. An illustration of this is how¬†Walmart¬†now sells Pop Tarts during times that precede a natural disaster. They observed that during times where people are preparing for hurricanes and/or a natural disaster, that not only did typical disaster items such as batteries, flash lights, and water sales spike but so did Pop Tarts sales. They then began to merchandise disaster related items and Pop Tarts in stores in order to make it easier for their customers to shop. Now who would have¬†hypothesized¬†that Pop Tarts would be a necessary item for preparing for a Tornado or Hurricane? In hind sight, it maybe easy to explain because of the product ease of use for their customers. However, if one removes the urge to try to understand what causes certain correlated events and just accepts the raw data and that these correlations exist, then a new era of marketing has begun using this strategy.

However, there are many ways to view the world, and one must be cautious as they develop ways to assess given circumstances of events. “Big Data” as some may have us to believe is not the cure all, but can be used in significant ways to observe the patterns of our society. This can be another great tool in ones tool box to be able to predict market trends, product sales, and any other activities if the right data is obtainable and accurate.(Read More – Big Data News Roundup: Correlation vs. Causation)

So what is real right now? Is the waiting over?

What is real is that market conditions truly are beginning to point to a return to new home demand. Here is what we know:

Cost to rent is up significantly

Home prices are way down

Foreclosures are slowing

New jobs are being created

New build numbers are at levels not seen in a decade

All of these indicators point to an oncoming demand for renters to move across the street to a new home of their own. The time is coming for families and couples to get back into the game. New homes being built will be a large part of that story.

In non distressed markets, jobs creation is showing some good growth. Rents and home prices are rising at about the same pace as apartments are in short supply. As resale home inventory is becomes thinned out, people will realize how few new home builds are available currently, only 78,000 in 41 cities studies by Metrostudy. That is down from 343,00 units at the peak! And is down from a decade ago as well. Construction is ripe to take off!

Even in distressed foreclosure markets like Phoenix, the outlook is indeed looking better. Investors have been an important part of buying through distressed properties. Families that have been displaced are moving into homes as renters, further reducing the number of homes on the resale market. Most importanly, foreclosures are slowing. We will hit some bumps, but the overarching story is that the health of the resale market is beginning to return. New construction will follow suit!

For several years the fundamental of cost to own vs. cost to rent along with new build levels has given a number that indicates an unhealthy market but for the first time in a long time, it would appear that that number is going in the opposite direction. One where confidence returns, home valuations rise, the American Dream becomes attainable once again.

To read a full article explaining why new home demand is on the near horizon, please read this informative article.

Who are they? What are they buying? How are they buying?

Finding a home buyer in this market can make grown men and women cry. It ľs OK, we don ľt judge… But now it ľs time to put away the Kleenex. After doing some digging, we have the news you want to hear. Are you ready? There are customers out there, it ľs true, that can bring you optimal profit this year!

We heard your cries and we wanted to take them as a challenge to find out just who these buyers are; what they look like, their wish lists, and what homes you should offer to draw them to your table. Turns out these customers are very knowable indeed. Furthermore, the home they are looking to buy is very specific.¬†In this post we will take a look at the characteristics of the buyer, characteristics of the home, and the process of buying a home to learn more about the current market‚Äôs potential ‚Äúoptimal profit‚ÄĚ customer.

Click the “more” link below to see for yourself YOUR most profitable home buyer in 2011 (Kleenex not required).read more »

With a warm and heartfelt Happy New Year, we at¬†The Contrado Group, look forward to serving the Home Building industry in 2011, starting with a campaign in Dialog Marketing. The concept of Dialog Marketing is all about connecting on a personal level with customers who will purchase because your company resonates with them enabling you to differentiate yourself and stand out as a leader in the marketplace.

Dialog Marketing invites your customers to connect, foster ongoing relationships and forge new ones.¬†The purpose of this message is exactly that.¬†¬†I‚Äôm inviting you to be part of this discussion, contribute¬†at your discretion and learn from others in your industry.¬† Let’s work together!

The topics covered¬†will be chosen by you.¬†¬†We plan to research and blend comments of previously blogged topics that will be made available after each topic is introduced. So, to get started, please vote on the suggested topics below that are most critical for your business this year and feel free to suggest additional topics:

Which topics are most important to you?
Learning Who Your Core Customer Is For Optimal Profit.Differentiating Your Business With An Uncommon Offering.A Marketing Strategy That Makes Everyone Want What You Have.A Sales Process That Creates Evangelists For Your Product.How Do You Out Maneuver the Competition?Utilizing The Internet, Dialog and Social Media Marketing.What Ideas Can We Borrow From Other Industries?

You will be able to log onto our website (www.thecontradogroup.com) to view our blogs and survey results of each topic. Our goal is grow our businesses together for 2011!!!